New Delhi, April 4: State-run Coal India is on the prowl for coal mine stakes abroad with a kitty of Rs 5,000 crore.
The company also plans to advise the government to sell a 5 per cent stake in the firm through a public offering. At present, Coal India is not listed and is government owned.
CIL also wants the government to consider a price hike as costs are nudging up though coal prices have remained stagnant for the last 33 months. However, it admits that the demand would have to be considered in the light of the government’s bid to halt the rising inflation.
“An IPO is needed as this would bring in a greater degree of financial discipline and ... better corporate governance,” said chairman Partha Bhattacharyya. CIL had mooted this plan several years ago but no action had been taken at that time. However, the Prime Minister has recently said strong state-run companies should be listed on bourses.
Bhattacharya told news-persons here that his firm would advise the government to dilute equity after independent directors have been appointed on the board of the coal company. “We would discuss the issue with the government during the current fiscal,” he said.
Coal India, which produces 85 per cent of India’s coal, also plans to invest Rs 2,400 crore to raise output to 384.5 million tonnes this financial year from 360.94 million tonnes produced last year.
The CIL chairman said Coal Videsh was independently scouting for equity buys in coal mines in Australia, Canada and Indonesia and was willing to invest up to Rs 5,000 crore in the equity for coal deals it was trying to negotiate.
“Our purpose is to pick up equity and also seal long term coal supplies with the firms where we take a stake,” said CIL officials.
CIL will also spend Rs 1,000 crore as equity contribution on a planned Rs 3,500 crore special purpose vehicle which would also be engaged in buying coal assets abroad.
SAIL, NTPC, Rashtriya Ispat Nigam, and National Minerals Development Corporation will join in the SPV.